• Sat
  • Aug 23, 2014
  • Updated: 11:59am

Macau can't afford to return to bad old days

PUBLISHED : Friday, 22 April, 2011, 12:00am
UPDATED : Friday, 22 April, 2011, 12:00am

Whether casinos increase the incidence of crime in a community has long been a subject of interest to governments, law enforcers and academics. Jobs are created and tax revenues boosted, usually dramatically, so weighing up the downsides against the benefits is important. Macau has taken the biggest gamble of them all, figuring that the economic gains are worth substantially more than the social losses. By some measures it is a bet that has paid the most handsome dividends, with the economy surging forward at rates that put those recorded on the mainland to shame for most years since the gaming industry was liberalised in2002.

Macau's year-on-year GDP growth rate last year was 26 per cent, the world's highest. Revenue from the 33 casinos accounted for 86.67 per cent of GDP and about 70 per cent of income. Another casino resort, the HK$15.5 billion, 2,260-room Galaxy Macau, opens next month. Macau became the world's biggest gambling hub at the end of 2006, surpassing the revenues of Las Vegas; it is predicted to become four times the size by next year.

If research by academics and the experience of places like Atlantic City is any guide, the more casinos that are built, the higher the crime rates. But the level in Macau last year dropped dramatically, with police recording 10,217 cases, 7.5 per cent fewer than in 2009. They are substantially higher numbers than when now ailing casino magnate Stanley Ho Hung-sun had a gambling monopoly, although the types of crimes carried out then were markedly different. In the years leading up to the city's return to Chinese rule in 1999, violent turf wars by triad members made Macau's streets dangerous.

The release from prison on March 31 next year of triad kingpin 'Broken Tooth' Wan Kuok-koi has sparked concern among security officials of a return to those days. They fear he will stage a comeback to the lucrative VIP gaming business, which accounts for the bulk of income for the casino industry. It is squabbling over that sector that was behind the bombings, murders and gangland attacks that for a time were so prevalent. Only after he and eight other triads were jailed in 1998 were police able to come to grips with the unrest.

Macau has changed dramatically since then. The vacuum that existed between Portugal and Macau's government has been replaced by a closely-watching Beijing. Foreign competition has made gambling a less seedy affair, with casino and resort complexes increasingly promoting family-orientated activities and going up-market. Tourist numbers have skyrocketed, with 25 million last year. Flashy buildings and vastly improved infrastructure have made most parts of the city unrecognisable from the sleepy backwater it had been.

But drugs, prostitution and corruption have not gone away. Nor have triads been forced from casinos - they are still involved in the VIP rooms. If the academics are to be believed, keeping them away will be next to impossible. Wan has still got family connections in the VIP business. His return has the potential to tarnish the city's reputation and destabilise its growth.

Wan's lawyer has rejected claims that his client intends to return to a life of crime or the casinos. In the triad world, that is no assurance. With so much riding on gaming, Macau cannot afford to put its trust in hope. Casino operators have to keep their industry as clean as possible. Regulators have to improve scrutiny of the companies that bring high-rolling gamblers to the VIP rooms. There is too much to lose by allowing a return to the bad old days.

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